Commodities Rally on War, AI Demand, and Dollar Weakness

Global commodity markets have entered their sixth 'super rally' since World War II. The surge is being driven by disruptions to crude oil supplies from the Middle East conflict, increasing demand for copper due to the proliferation of AI data centers, and expanded gold buying amid dollar weakness.

The FTSE Commodity CRB Index, a comprehensive gauge of commodity prices, has risen 42% this year to its highest level since 2008. Copper futures have climbed more than 47%, while gold and silver have gained over 20% and 50%, respectively.

Brent crude oil prices have surpassed $100 per barrel, with the US attacking Iranian vessels in the Strait of Hormuz and Iran retaliating by targeting tankers. The prolonged Middle East crisis is taking a serious toll on global supply chains, leading some analysts to predict that prices could reach as high as $150 per barrel.

Ole Hansen, head of commodity research at Saxo Bank, noted: 'Brent holding above $100 signals that the market is increasingly taking the prolonged Middle East crisis and resulting supply disruptions seriously.'